analysis of Chevron

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Case Analysis Of Chevron

GROUP MEMBERS

Rizwan Ashraf
Shahid Iqbal
Mushtaq
Hassan
Zeeshan Anwar

1879: CHEVRON began with an oil discovery in north of LOS ANGELES.
1900: Bought by standard oil corporation.
1906: Merged name become SOCAL.
1948: Entered into petrochemical industry.
1984: Merger between standard oil company and gulf oil. As a part of
merger SOCAL changed its name to chevron corporation.
2001: Bought TEXACO for $37.5 billion.
2005: Acquisition of UNOCAL made chevron world’s largest producer of
geothermal energy.

A World Class Global Energy Company
Chevron Corporation is an American multinational
energy corporation
There business oil, gas, and geothermal energy
industries
It including

exploration and production;
refining, marketing and transport;
chemicals manufacturing and sales
power generation

66,000 employees

18 refineries

5 popular consumer brands:
Chevron, Unocal,Texaco ,standard and Caltex

25,000+ service stations
5

“At the heart of the chevron way is our vision ... to be the global
environmental friendly energy company most admired for its
people, partnership and performance”

Chevron
Standard Oil
Texaco
Caltex
Unocal

Star Mart
Extra Mile
Redwood Market
Town Pantry

Techron- Chevron

Clean System

Royal Dutch Shell
ExxonMobil
BP
ConocoPhillips

External FACTOR EVALUATION MATRIX

Opportunities Weight Rating Weighted Score

1 Increase usage for energy 0.15 4 0.60

2 Increasing price of energy 0.12 3 0.36
3 Increasing propensity of people to spend 0.10 3 0.30
4 Increasing mobility of labor, capital and technology 0.09 2 0.18
5 Demand shifts for renewable energy 0.10 3 0.30

Threats
6 Depletion of natural energy resources 0.11 2 0.22
7 Royal Dutch Shell and Exxon is rivalry in the industry 0.08 2 0.16
8 Regulations restricted excessive emission of CO2 0.07 2 0.14
9 The credit crisis and volatile commodity prices 0.10 3 0.30
of2008
10 OPEC restrictions, civil wars and hurricanes. 0.08 2 0.16

Total 1.00 2.72

Internal FACTOR EVALUATION MATRIX

Sr.No Strengths Weight Rating W.Score
1 Spending on alternative energy 3.2 billion since 0.07 3 0.21
2002.
2 Continuous investment in high profile projects to 0.08 3 0.24
increase oil production.
3 Outstanding earning $23.9 billion in 2008 0.11 3 0.33

4 Achieve HART energy publishing refiner of the year 0.08 4 0.32
award in 2009
5 Investment in 13 power generation projects in Asia 0.10 3 0.30
and us
6 4th largest integrated energy company in the world. 0.08 3 0.24
7 Operating in more than 100 countries and with 0.10 3 0.30
around 25,000 service stations worldwide
8 Had global refining capacity of more than 2 mm 0.08 3 0.24
barrel per day.


Weaknesses Weight Rating W.Score

71 % drop in income second quarter of 2009. 0.08 2 0.16

Marketing operations lost $95 million in second 0.05 2 0.10
quarter of 2009.

stop drilling new gas wells in US continent. 0.05 2 0.10

51 % decrease in revenue. 0.07 1 0.07

Chemicals – significantly lower margins, lower 0.05 2 0.10
income from equity.

Total 1.00 2.71

Competitive Profile Matrix
CHEVRON EXXON MOBIL SHELL
Critical success factors weight Rating Score Rating Score rating score

Advertising 0.20 3 0.60 3 0.60 3 0.60

Product quality 0.10 3 0.30 4 0.40 2 0.20

Management 0.07 4 0.28 3 0.21 3 0.21

Financial position 0.10 3 0.30 2 0.20 3 0.30

Customer loyalty 0.05 2 0.10 3 0.15 3 0.15

Global expansion 0.20 3 0.60 4 0.80 4 0.80

Market share 0.09 3 0.27 3 0.27 4 0.36

Logistics 0.15 3 0.45 3 0.45 3 0.45

Production capacity 0.04 3 0.12 3 0.12 4 0.16

Total 1.00 3.02 3.20 3.23

Space Matrix
Financial position Rating Stability position rating

Spending on alternative energy 3.2 billion since 5 The economic environment is unstable especially -5
2002. in under developing countries.
51 % decrease in revenue. 4 The risk of expanding the business is greater due -4
to natural disasters.
Outstanding earning $23.9 billion in 2008 6 The fluctuation of oil price affects business -5
environment.
Marketing operations lost $95 million in second 3
quarter of 2009.
184=4.5 -143=-4.67

Industry position Competitive position

The demand of energy usage is increasing 6 Achieve HART energy publishing refiner of the -4
tremendously. year award in 2009
High capital investment and the use of 5 Investment in 13 power generation projects in -4
technology have created the barriers of entry. Asia and us
The company has investing for alternative 5 4th largest integrated energy company in the -5
energies. world.
Operating in more than 100 countries and with -5
16/3=5.33 -18/4=-4.5

Boston Consulting Group (BCG) Matrix

DIVISION REVENUES Revenue Profit Profit % Mkt share Growth
MILLION $ % million $ % rate %

1.Upstream and 1,28,747 47 % 18,187 76 24% 45 %
gas

2.Downstream 1,33,594 49 % 6,222 26 27% 30 %

3.Chemicals 2,617 1% (239) (1) 20% 5.96 %

4.Power 8,047 3% 239.31 1 30% 32 %

Total 2,73,005 100 23,931 100

Boston Consulting Group (BCG) Matrix

1
4 2

3

Quantitative strategic planning
matrix Invest in
solar and
Invest in
biofuel
wind energy energy
Opportunities Weight AS TAS AS TAS

Increase usage for energy 0.15 2 0.30 4 0.60

Increasing price of energy 0.12 2 0.24 4 0.48
Increasing propensity of people to spend 0.10 2 0.20 3 0.30
Increasing mobility of labor, capital and technology 0.09 2 0.18 3 0.27

Demand shifts for renewable energy 0.10 4 0.40 3 0.30

Threats
Depletion of natural energy resources 0.11 2 0.22 3 0.33
Royal Dutch Shell and Exxon is rivalry in the industry 0.08 - - - -
Regulations restricted excessive emission of CO2 0.07 3 0.21 1 0.07
The credit crisis and volatile commodity prices 0.10 - - - -
of2008
OPEC restrictions, civil wars and hurricanes. 0.08 2 0.16 1 0.08

Strengths Weight As TAS AS TAS
1 Spending on alternative energy 3.2 billion since 0.07 3 0.21 3 0.21
2002.
2 Continuous investment in high profile projects to 0.08 - - - -
increase oil production.
3 Outstanding earning $23.9 billion in 2008 0.11 2 0.22 4 0.44
4 Achieve HART energy publishing refiner of the year 0.08 2 0.16 3 0.24
award in 2009
5 Investment in 13 power generation projects in Asia 0.10 - - - -
and us
6 4th largest integrated energy company in the world. 0.08 2 0.16 3 0.24

7 Operating in more than 100 countries and with 0.10 1 0.10 4 0.40
8 Had global refining capacity of more than 2 mm 0.08 1 0.08 3 0.24
barrel per day.
weaknesses

71 % drop in income second quarter of 2009. 0.08 - - - -

Marketing operations lost $95 million in second 0.05 - - - -
quarter of 2009.

stop drilling new gas wells in us 0.05 - - - -
continent.
51 % decrease in revenue. 0.07 - - - -

Chemicals – significantly lower 0.05 - - -- -
margins, lower income from equity.
Total 1.00 2.84 4.20

S # 1= invest in solar and wind energy = 2.84

S# 2= invest in biofuels = 4.20

Recommendations

• Should have to sale its chemical business because it becomes
dog.
• Should invest in wind and solar energy.
•Start exploration of gas wells
•Get help from technology
•Should invest in bio-fuel energy sources.
•Should have to improve ethical operating standards

analysis of Chevron

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